Arbitration And Conciliation Act 1996 Analysis

ORMED
THE ACT OF 1996:
Over the last half century or so international commercial arbitration has managed to establish its independence from the courts to such an extent that special provisions that protect its status are taken for granted. Nevertheless such supportive provisions are a vital part of any legislative instrument in support of arbitration- after all; one never knows how arbitration will develop in future. T he policy of the courts and the legislature, therefore, in recent years has been very much in favour of arbitration and granting of stays. This policy has been taken further by the arbitration and conciliation act 1996, by extending it to all arbitrations. Section 8 of this act, authorises the judicial authority, before which
This section has been described as one of the pillars of this act because it serves as a “protective barrier between the institution of international commercial arbitration and the national court system”. No instrument of law that supports arbitration can be envisaged without a similar provision. This section provides a perfect safeguard against court intervention. This act is peculiar in many ways, beginning with its addressee, the local court, which in this provision, is required to refer the parties to arbitration when seized of a dispute that is the subject of an arbitration. However, there is a second, kind of hidden, addressee- the party requesting arbitration, that party is ordered to request the reference of the dispute to arbitration not later than when it submits its first statement on the substance of the dispute before the
However, it makes some significant departures from this model. 1st this section uses the word ‘judicial authority’ for the word ‘court’ used in article 8 of the model law. The most significant change however, is that after the words ‘refer the parties to arbitration’, the wording ‘unless it finds that the agreement is null and void, inoperative and incapable of being performed,’ appearing at the end of article 8 (1) has not been retained in section 8 (1) by the parliament. The object of this departure is to bar the judicial authority from going into the jurisdictional questions of existence and validity of the arbitration agreement. The question as to the existence and validity of arbitration agreement, now fall in the exclusive jurisdiction of the arbitral tribunal under section 16. This is designed to give effect to the legislative policy of marginalizing judicial intervention as adopted in section 5 this